The Impact of Tunneling Behavior on Equity Incentive Plan—Empirical Evidence of China’s Main Board from 2006 to 2013

摘要

Though the equity incentive plan was introduced into China just for a short time, the number of listed companies that implemented equity incentive plan was growing fast. In order to improve the effect of equity incentive plan on alleviating agent problem between the owners and managers, China Securities Regulatory Commission supports it by the developing the legislation and prefer-ential tax policies. In China, it is a general phenomenon of major shareholders’ tunneling behavior. However, there is little research focusing on the relationship between tunneling behavior and equity incentive plan. This paper mainly researched the effect of major shareholders’ tunneling behavior on the preference of equity incentive plan, using cross-sectional data of A-share listed companies in China security market from 2006 to 2013. Actually, the empirical result showed that, the major shareholders’ tunneling behavior has a negative effect on equity incentive plan. The major shareholders’ tunneling behavior affects the welfare tendency of equity incentive plan, and the companies with serious major shareholders’ tunneling behavior are more likely to choose the welfare-tendency equity incentive plan.